The Relationship

Релацията „банкова конкурентност - стабилност” в светлината на глобалната финансова криза
The Relationship "Bank Competitiveness - Stability" in the Light of the Global Financial Crisis

Author(s): Lubomir Georgiev
Subject(s): Supranational / Global Economy, Financial Markets
Published by: Икономически университет - Варна
Keywords: banking competition; financial stability; business models of banking; shadow banking system; global financial crisis

Summary/Abstract: The article attempts to answer the question: is the higher banking competition underlying the factors that triggered the financial crisis of 2007-2008? In this context, it focuses on: (i) the financial liberalization and the new competitive environment after 1990, dominated by financial institutions practicing the business model "originate-and-distribute" and "shadow banking"; (ii) the role of financial innovation, the concentration and excessive risk-taking of excess banks over the 2007-2008 crisis; (iii) the lessons from the crisis for the relationship "bank competitiveness - financial stability". As a result of the analysis it is concluded that the competition in banking is not dangerous in itself. Other factors such as the business model of banking, the structure of funding and the regulatory framework that determine banks' sensitivity to risk-taking can be at the heart of the global financial crisis.

  • Issue Year: 61/2017
  • Issue No: 3
  • Page Range: 137-157
  • Page Count: 21
  • Language: Bulgarian